Delivery services company FedEx Corporation (NYSE: FDX) will release its financial results for the fourth quarter of Fiscal 2022 tomorrow, June 23, after the market close. It offers transportation, e-commerce, and business services globally. Furthermore, the company is innovating digitally under the FedEx brand.
Labor market challenges, shipping demand, supply-chain issues, and the negative impact of the omicron variant baffled FedEx’s financials to a great extent. On a positive note, FedEx announced a 53% quarterly dividend increase to boost long-term value for shareholders.
In the last quarter, FedEx posted lower-than-expected earnings, though revenue surpassed analysts’ expectations. The resurgence of the pandemic, increased transportation costs, and wage rates acted as headwinds.
Unfortunately, the Omicron led to volume softness of about $350 million during the quarter. Also, at FedEx Ground, high operating costs on the back of a competitive labor environment resulted in elevated labor rates and lifted total costs by about $210 million.
Therefore, prior to the Fiscal Q4-2022 earnings release, with the help of TipRanks’ Website Traffic Tool, we can visualize the company’s performance in Q4. This new tool measures and analyzes a company’s website visits over a specified time period.
The decline in website visits could indicate weak demand for the company’s products and services.
Website Visit Data Reflects a Downtrend
Using the website traffic tool, a downtrend was identified. In Fiscal Q4 2022, total visits to fedex.com showed a decreasing trend on a global basis, representing a decline of 8.13% from the prior-year quarter and a 19.13% drop on a sequential basis.
The decline in website visits could be due to a number of factors including, macro uncertainty, post-pandemic effects, and geopolitical tensions.
For Fiscal Q4 2022, the consensus estimate is pegged at earnings of $6.87 per share on total revenues of $24.5 billion.
Wall Street’s Take
Despite the short-term challenges, Wall Street analysts seem optimistic about FDX stock prior to its Q4 print in anticipation of long-term potential gains.
Recently, Robert W. Baird analyst Garrett Holland reiterated a Buy rating and a price target of $300 (30.14% upside potential) on FedEx.
Holland said, “Despite the deteriorating macro outlook, FDX offers more company-specific levers to improve profitability, which should drive better-relative growth in 2023. Investors now await more detail about the structural margin expansion opportunity and earnings power (likely ~$27-$28/sh) at the upcoming Investor Day.”
The analyst considers the company’s current risk/reward profile favorable and maintains a bullish stance.
Consensus among analysts is a Strong Buy based on 11 Buys and one Hold. The average FedEx price target of $288.42 implies 25.12% upside potential from current levels. However, shares have lost 21.65% over the past year.
Additionally, FedEx scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
Insider Trading
Corporate Insiders are positive about FedEx. According to the TipRanks Insiders page, corporate insiders have bought shares worth $16.9 million in the past three months. Per the SEC (Securities and Exchange Commission) filings and TipRanks’ Insider Trading Activity tool, last month, FedEx CEO Frederick W. Smith purchased 198,675 shares valued at $16.94 million.
The Bottom Line
The website traffic trends indicate that FedEx might report disappointing results in Q4. Nevertheless, the recovery in volumes and the focus on digital transformation indicate significant long-term gains. Investors may therefore consider the current price level as a promising buying opportunity.
